The Public Policy

Please Don’t Tell Obama What Comes After a Trillion!

Pretty funny, but what about the Debt Tsunami?

By 7.14.09

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My daughter who lives in Wyoming called my attention to a bumper sticker, white letters on a black field, bearing the message, "Please don't tell Obama what comes after a trillion!"

There are only two other bumper stickers which I ever considered affixing to my car. One read, "Aubrey Maturin in '08–Not a moment to lose!" alluding to the two famous characters from the Patrick O'Brian sea-faring novels.

The other was "TOM IZZO FOR PRESIDENT," referring to the national champion coach of the Michigan State University Spartans basketball team, a great coach and a fine man.

The other day I saw another one, very tempting, but a bit snarky: "Honk if I'm paying your mortgage."

But I could not resist my daughter nor the whimsy and humor of the bumper sticker about President Obama and trillions of dollars. So I put it on my rear window, hoping that I would not be rewarded with a brick through the glass.

The bumper sticker was a hoot and quite timely given talk of a second round of stimulus spending. Calling for another round of spending is awfully premature since only a fraction of the stimulus package has gotten out the door. Isn't it a bit early to be considering more spending, debt and taxes? Even on Keynesian grounds, it is hard to expect a stimulus to occur when the lion's share of the money has not yet found its way into the economy. In fairness, the Obama administration has not been calling for a second stimulus, although Democratic Governor Ed Rendell of Pennsylvania has called for it as have other left-of-center economists.

The good news is that the Republicans in the House and even the Senate are digging in on this issue. Moreover, there is hope in the air that the Blue Dog Democrats are in the process of finding their green eyeshades, which they seem to have misplaced these last few months.

The Republicans, of course, are laboring under a heavy credibility deficit due to their lack of fiscal probity and responsibility while controlling three branches of government for nearly eight years. Having besotted themselves in a spending spree exceeding Lyndon Johnson's Great Society, and, despite eight years of prosperity, failing to attend to hemorrhaging entitlement spending and aggravating the problem through the creation of a prescription drug benefit for seniors, they now find themselves in a kind of public relations Siberia as it relates to what was once one of their core issues.

The Democrats, as much as the Republicans, are complicit in a disaster which has been decades in the making and continues on its destructive path driven by ongoing retirements of the Baby Boomers. Even the Washington Post, citing recent studies by the Congressional Budget Office (CBO), runs lead editorials with titles like "The Debt Tsunami."

"To put it bluntly, the fiscal policy of the United States is unsustainable," opines the Post.

Under reasonable assumptions, the CBO says the publicly held debt of the U.S. government is heading to 82 percent of GDP by 2019, double that of 2008. With increasing interest payments over time, the debt will reach a record level of 113 percent of GDP in 2026 and 200 percent in 2038.

"This clearly creates a scenario where the country's going to go bankrupt. It's almost that simple," said Senator Judd Gregg (N.H.), senior Republican on the Senate Budget Committee. "One would hope these numbers would wake somebody up." Ya think?

The cumulative national debt, a recession, and an aging population are putting enormous pressure on the federal government and, ultimately, taxpayers, young ones at that.

The Republicans were replaced by Democrats who, having justly denounced the GOP for running up trillions of dollars worth of debt, are now trying to up the ante with more record spending barely disguised by the fig leaf of the stimulus package. Here's the new boss, same as the old boss. The GOP, finding itself in the political wilderness, having managed to destroy its branding for fiscal conservatism, has been handed a "Get Out of Jail Free" card (to mix metaphors) by the party now in power which is spending unimagined sums of taxpayers' dollars. Here is a chance for Republicans to re-brand themselves. But this time they have to mean it and scrap the pork, the earmarks and the subsidies for their favored children. Can they seize the moment?

But for the massive and unprecedented level of spending by the current Administration and Congress, Americans would not pay any attention to the claims of Republicans regarding excessive spending, taxes and debt. There is, however, a restiveness in the American public that might make it receptive to a serious, sustained critique of the current policy of spending as if there was no tomorrow.

While the Republicans should work to regain their reputation for fiscal conservatism, merely resisting the usual round of spending by the party in power is not going to save the nation. They have to get serious about a bipartisan approach to reforming entitlements. There is simply no other way to get America back on the wagon without some kind of political solution to the financial plight of Medicare, Medicaid and Social Security.

In the face of the tsunami of entitlement-driven debt, the really horrible sin is one of omission, i.e., failure to engage the public, the opposition and rank-and-file Republicans on one of the greatest issues of our time.

The moral, economic and political dilemma facing the GOP is what to do when the culture has shifted so drastically in favor of government welfare and dependencies, not just for poor people, but businesses, states, cities, farmers, ranchers, seniors and the middle class as a whole? Is there any historical precedent for rolling back or reducing middle-class entitlements once granted? Can the party of Lincoln resist substantial tax increases in its quest to keep the nation from bankruptcy? Is any kind of consensus possible to shape tax increases in such a way as to limit disincentives for investment, work and productivity while generating a reasonable amount of revenue?

All good questions. Our children and grandchildren await the answers.

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About the Author

G. Tracy Mehan III served at the U.S. Environmental Protection Agency in the administrations of both Presidents Bush. He is a consultant in Arlington, Virginia, and an adjunct professor at George Mason University School of Law.